Canara Bank (CBK IN) – Q1FY27 Result Update – Comfort on NIM/LDR may cushion earnings – Upgrade to ‘BUY’
Published on 28 Jul 2026
CBK saw steady quarter as core revenue (NII+fees) was in-line and net slippage was lesser at 24bps (PLe 64bps). Loan growth at 4.7% QoQ was superior to peers and was broad based. While reported NIM at 2.5% has been lowest among peers; it has likely bottomed out as incremental lending is happening at higher than avg. yields while there is more scope to reduce deposit cost. One-time ECL impact could be ~10% of equity which the bank would absorb over 2 years (RBI allows 5 years); sustainable impact was guided at <10bps. LDR is comfortable at ~79%. We maintain multiple at 1.0x on Mar’28 ABV and keep TP at INR 150. Upgrade to ‘BUY’ from ‘ACCUMULATE’.
